Mortgage Assumption by Florida Buyers
A mortgage assumption allows a Florida buyer to take over the seller's existing mortgage, retaining its original terms including the interest rate. This strategy is most valuable when existing rates are below current market rates.
Which Loans Are Assumable
FHA and VA loans are generally assumable with lender approval and buyer qualification. Conventional loans with alienation clauses (due-on-sale provisions) are typically not assumable because the lender can call the full balance due upon transfer. Some portfolio loans held by community banks may permit assumption on a case-by-case basis.
Seller's Continued Liability
Florida sellers must understand that assumption does not automatically release them from the mortgage obligation. The lender can still pursue the original borrower if the assuming buyer defaults. Sellers should negotiate a written release of liability from the lender as part of the assumption process. Without this release, the seller remains contingently liable for the full remaining balance, which affects their ability to qualify for new financing.
Related Terms
Barnes Walker Real Estate
Barnes Walker advises buyers and sellers on mortgage assumptions throughout Southwest Florida. Contact us for financing guidance.
Florida Law Reference
Fla. Stat. Ch. 697
Defines mortgages as liens on real property and establishes requirements for mortgage creation, assignment, and satisfaction in Florida.
Reviewed by the attorneys at Barnes Walker, Goethe, Shea & Robinson, PLLC